International: Digital Platforms Add Revenue to Newspaper Coffers

NEW YORK (AdAge.com) -- While almost every newspaper's paid circulation and print-ad revenue continue their long, steady declines, the digital platforms that have contributed to the fall are also emerging as newspapers' best lifeline ahead.

Ad spending on newspapers' websites in the third quarter reached $773 million, for example, a 21.1% gain over the third quarter of 2006, according to the Newspaper Association of America. In a report released today, the association added that the increase represents the 14th consecutive quarter of double-digit ad-spend growth for newspaper sites. Online advertising accounts for 7.1% of newspaper ad revenue, up from 5.4% in the third quarter last year, the association said.

Newspaper companies collected $10.9 billion in third-quarter revenue, down 7.4% from the third quarter last year, the association said. Spending on print advertising in newspapers fell 9% to $10.1 billion. Problem areas include classified advertising, which dropped 17% in the quarter. Retail fell 4.9%, and national slipped 2.5%.

Improvement crucial
That's why online improvement is crucial for the industry, which is desperately trying to shift the emphasis from those depressing paid-circulation and print-ad-revenue stats.

"Newspaper websites continue to generate substantial revenue by offering advertisers access to the nation's most desirable group of consumers," NAA President-CEO John F. Sturm said in a statement today. "At the same time, broader economic issues are impacting our industry the same way they are impacting other media—the continued fallout from declines in the housing market clearly affects real estate, recruitment and retail advertising. Newspaper companies continue to take aggressive measures to prepare for the future during a period of economic challenges for the industry."

One (of several) big challenges remaining online: making sure newspapers are in control of the ad revenue against their own content instead of seeing the big portals, such as Yahoo or Google News, sell ads against links to newspapers' content.

"The portals are running off with our best stuff, and we're afraid or unable to make or enforce deals that drive fair value," Associated Press President-CEO Tom Curley told colleagues in an address earlier this month.